The Modi government is set to fast-track a $1.5-billion deal to acquire 197 light utility helicopters (LUH) for the army. The award of the contract was stuck with the previous UPA government, the latest delay coming after the controversy over buying helicopters for VVIP use surfaced.

Sources told FE that a fresh request for proposal (RFP) for the chopper deal will be issued by the new government within a month's time. Defence minister Arun Jaitley has already been been briefed about the delayed/on hold projects, including the procurement of the LUHs.

Once the RFP process is competed, it would take another two to three years before the first helicopter is delivered. The delays in the previous rounds of bidding have already hurt the army badly as it has been searching for a modern helicopter to replace the aging Cheetah/Chetak helicopter. Most of these are already running on an extended lease of life and need immediate replacement.
With defence as one of the priority areas for the BJP-led government, it is widely expected to clear the policy logjam and speed up the award of critical projects including the much-delayed $20-billion medium multi-role combat aircraft or MMRCA deal.

The process to replace the Cheetah/Chetak helicopters â€“ which undertake patrol, reconnaissance and evacuation missions in forward locations and high-altitude areas like Siachen â€“ had been cancelled twice earlier by the UPA government and initiated afresh only to be put on hold again after the AgustaWestland row came to light where allegations were levelled that the deal was being designed to favour the Italian defence major.

As a consequence, the army had requested the ministry to delay the acquisition process and the Director General (Acquisition) had asked Eurocopter and Kamov to extend their bids offer till the end of 2013. Two rounds of trials of aircraft from these companies had already taken place at a substantial cost. The procurement of the 197 light helicopters has been dogged by technical problems as well. In 2003, India issued an RFP, estimating a deal worth $500-600 million to buy 60 helicopters outright, with the remaining 137 being built under licence by Hindustan Aeronautics (HAL). Eurocopter's AS550 C3 Fennec and Bell Textron's 407 competed in the second and final round of summer trials, and in 2007 the process ended up completely derailed.

A new RFP out for a successor "Reconnaissance and Surveillance Helicopter programme" (RSH) went out in 2008, and testing was done in 2010. Sources confirmed "both the Eurocopter's Fennec and its competitor, the Russian Kamov Ka-226T, have not completely met the specifications". However, a technical panel has studied the deviations and made certain recommendations to the MoD. The decisions made have not been accepted by the Defence Acquisition Council, said the sources.

According to the last RFP issued by the MoD, initially 60 helicopters will be acquired off the shelf and the balance will be manufactured in India under licence by the HAL.

However, HAL has since claimed that it had developed its own LUH, and that the 3-tonne aircraft will roll off its assembly line by 2015. With the state-run company entering the fray, though still not a part of the RFP process, the entire process may take an interesting turn.

The Modi government is set to fast-track a $1.5-billion deal to acquire 197 light utility helicopters (LUH) for the army. The award of the contract was stuck with the previous UPA government, the latest delay coming after the controversy over buying helicopters for VVIP use surfaced.

Sources told FE that a fresh request for proposal (RFP) for the chopper deal will be issued by the new government within a month's time. Defence minister Arun Jaitley has already been been briefed about the delayed/on hold projects, including the procurement of the LUHs.

Once the RFP process is competed, it would take another two to three years before the first helicopter is delivered. The delays in the previous rounds of bidding have already hurt the army badly as it has been searching for a modern helicopter to replace the aging Cheetah/Chetak helicopter. Most of these are already running on an extended lease of life and need immediate replacement.
With defence as one of the priority areas for the BJP-led government, it is widely expected to clear the policy logjam and speed up the award of critical projects including the much-delayed $20-billion medium multi-role combat aircraft or MMRCA deal.

The process to replace the Cheetah/Chetak helicopters â€“ which undertake patrol, reconnaissance and evacuation missions in forward locations and high-altitude areas like Siachen â€“ had been cancelled twice earlier by the UPA government and initiated afresh only to be put on hold again after the AgustaWestland row came to light where allegations were levelled that the deal was being designed to favour the Italian defence major.

As a consequence, the army had requested the ministry to delay the acquisition process and the Director General (Acquisition) had asked Eurocopter and Kamov to extend their bids offer till the end of 2013. Two rounds of trials of aircraft from these companies had already taken place at a substantial cost. The procurement of the 197 light helicopters has been dogged by technical problems as well. In 2003, India issued an RFP, estimating a deal worth $500-600 million to buy 60 helicopters outright, with the remaining 137 being built under licence by Hindustan Aeronautics (HAL). Eurocopter's AS550 C3 Fennec and Bell Textron's 407 competed in the second and final round of summer trials, and in 2007 the process ended up completely derailed.

A new RFP out for a successor "Reconnaissance and Surveillance Helicopter programme" (RSH) went out in 2008, and testing was done in 2010. Sources confirmed "both the Eurocopter's Fennec and its competitor, the Russian Kamov Ka-226T, have not completely met the specifications". However, a technical panel has studied the deviations and made certain recommendations to the MoD. The decisions made have not been accepted by the Defence Acquisition Council, said the sources.

According to the last RFP issued by the MoD, initially 60 helicopters will be acquired off the shelf and the balance will be manufactured in India under licence by the HAL.

However, HAL has since claimed that it had developed its own LUH, and that the 3-tonne aircraft will roll off its assembly line by 2015. With the state-run company entering the fray, though still not a part of the RFP process, the entire process may take an interesting turn.

Don't you think that it's not the money, that's the problem, but complicated and intransparent tender?

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in recpect to the previous Govt ie congress since modi came to power a week ago can't comment much on him for now, coming back to the question Factionalism within the Army, legal manoeuvres by defence firms, and dysfunction in the defence production system have all thus contributed to the mess along of course with outright corruption. Fixing the crisis needs sustained commitment to reforming India's defence acquisition system from root up

Don't you think that it's not the money, that's the problem, but complicated and intransparent tender?

Click to expand...

The way defense deals works practically in India involves middleman(defense/politician/babus),wine,woman etc which often leads to delays and re-tender and even banning/suspension of the company.

Antony the former Defense Minister of UPA used to ban the top Companies citing the "corruption" angle has played with security of the nation.Instead of removing the corrupt elements in Defense procurement and making the process more transparent he simply banned the companies who are often #1 in their segment.

Re: Narendra Modi govt to fast-track $1.5-bn deal, Army to get 197 lig

Ground work has been laid by the earlier trials. now we have two companies left in the fray. no point in going over new trials as the contending birds have remained the same.

Mr.Jaitley should cut the crap and immediately place order for these helicopters.

With HAL throwing it's hat in the ring, the process should not be delayed. Rather HAL should be asked to go ahead with an initial order for say 25 Helicopters. IF the LUH from HAL is successful then the import order can be reduced at a later stage.

Re: Narendra Modi govt to fast-track $1.5-bn deal, Army to get 197 lig

Yes, I don't see why they need an RFP when the HAL LUH will should be able to meet the need in the time frame mentioned. I think IA/IAF should closely track the LUH and HAL should put extra focus onto getting to first flight + IOC/FOC certification, I think if we have a first flight by end of year and testing for the whole of next year, we can surely have full scale production starting end of 2016, at a rate of 40 choopers per year, this need can be fullfilled within 5 years.

Re: Narendra Modi govt to fast-track $1.5-bn deal, Army to get 197 lig

While LUH will be ready for induction so no,need for going foreign heli. Even LUH will provide commonality with Dhruva and LCH so it will be win-win for IA. Till Army can use Dhruva in place of Cheetah/Chatak. Eventually most of the work is already taken by Dhruva. That is a boom for our desi heli industry and This tender can spoil the things.

While LUH will be ready for induction so no,need for going foreign heli. Even LUH will provide commonality with Dhruva and LCH so it will be win-win for IA. Till Army can use Dhruva in place of Cheetah/Chatak. Eventually most of the work is already taken by Dhruva. That is a boom for our desi heli industry and This tender can spoil the things.

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Completely agree with you. This would reduce the requirement of HAL LUH, which will severely affect our indigenous production capability.

Light-utility choppers to be made in India, not imported
Published August 30, 2014 | By admin
SOURCE: TNN

The Modi government on Friday scrapped the long-pending acquisition of 197 light-utility helicopters from abroad, the selection process for which has been dogged by corruption allegations and technical deviations.

Instead, the Arun Jaitley-led defence acquisitions council (DAC) decided all the 384 light-utility helicopters needed by the Army and IAF to replace their ageing Cheetah/Chetak fleets will be made in India with foreign collaboration.

The step will boost the indigenous defence production sector, and is in tune with Modiâ€™s exhortation to global companies to â€œcome, make in Indiaâ€. Top defence ministry officials, in fact, said the â€œbuy and make Indianâ€ categorization of the light-utility helicopters had the potential to give Rs 40,000 crore worth of business to the domestic industry.

But, itâ€™s equally true that the militaryâ€™s already long wait to replace their virtually obsolete Cheetah/Chetak helicopters, used even in high-altitude areas like Siachen, just got longer. The 197-helicopter deal, which had Russian Kamov-226T and Eurocopter AS 550 C3 Fennec locked in competition since 2008, has now been scrapped for the third time over the last decade due to irregularities.

Defence PSU Hindustan Aeronautics has also failed to deliver on its project to develop 187 similar helicopters, which was sanctioned by the Cabinet committee on security in February 2009, in a double whammy for the armed forces.

But there was better news on other helicopter fronts, even as the DAC cleared military modernisation proposals worth around Rs 20,000 crore. Ahead of Modiâ€™s visit to the US next month, two major deals worth $2.5 billion for the iconic American Apache attack and Chinook heavy-lift helicopters cleared the last hurdle when the DAC approved the revised offsets packages submitted by aviation major Boeing.

The $1.4 billion deal for 22 AH-64D Apache Longbow gunships, armed with deadly Hellfire and Stinger missiles, and the $1.1 billion one for 15 CH-47F Chinooks, equipped with powerful contra-rotating tandem rotors, will now have to get the final nod from the finance ministry and then Cabinet committee on security.

The DAC also gave the go-ahead for the opening of commercial bids for the acquisition of 16 naval multi-role helicopters (MRH). It was on hold for long since one of the two contenders in the fray, the European NH-90 helicopter, has Italian conglomerate Finmeccanica as a partner. The other contender is the American Sikorsky-70B chopper.

With the government this week imposing â€œa partial banâ€ on Finmeccanica, whose UK-based subsidiary AgustaWestland is embroiled in the VVIP helicopter scandal, the NH-90 helicopter may lose out in the 16-MRH contract.

The contract is critical for the Navy, grappling with a crippling shortage of anti-submarine warfare helicopters, since it is to be followed by a bigger one for 123 helicopters at a cost of over $3 billion.

AgustaWestland, whose now infamous Rs 3,546 crore contract for 12 VVIP helicopters was cancelled by India in January, had also initially figured in the 197-helicopter project. The CBI is investigating the role played by an Indian Army brigadier who allegedly demanded money from AgustaWestland to swing the 197-helicopter deal its way as well, as was reported by TOI earlier.